Do you know your super balance?
What about whether your fund is performing as well as its competitors? Or just how many accounts you might have floating about from different jobs you’ve done over the years?
What about what your insurance coverage is under your super fund – or if you have any insurance at all?
With the recent changes to superannuation laws that were waved through the Senate last week by a compliant One Nation and a clueless Senate cross bench, Australian workers’ retirement prospects are under more pressure than ever before.
The era of set and forget superannuation is over, and workers are going to have to be fully engaged with where their super balance sits, how their fund is performing, and how to get the best outcome from their hard-earned savings.
Stephen Jones is the Labor member for the seat of Whitlam in New South Wales and the Shadow Minister for Financial Services.
He spoke with “On the Job” following the passage of the Liberals’ latest Superannuation laws and said that these changes were a huge win for high fee, underperforming retail funds.
“If this Bill is designed to reduce fees and improve performance, how come it excludes some of the highest fees and the worst performing funds from the benchmarking process?” asked Jones.
“This Bill does exactly that. Which means the three million Australians which are lingering in those heritage products, those choice funds, which are subpar, will continue to have their retirement savings pillaged.
“The Productivity Commission says that can amount to anywhere up to $230,000 in lost retirement savings over a lifetime. So that’s three million Australians, that’s close to one in five who won’t receive any benefit from the new benchmarking arrangements.”
Jones also highlighted that the consequences for some workers who work in industries where they are exposed to risk at work could be significant.
“They are going to leave workers in some of the most high-risk industries either without life insurance or having to fork out hundreds if not thousands of dollars more for their life insurance cover, and that is because you are stapled to the first fund that you join,” Jones explained.
“If you start as a retail worker or a hospitality worker, and you end up as a policeman, a nurse, a building worker, construction industry worker, you’re going from a relatively safe to a relatively dangerous occupation.”
“Chances are your old insurance in your first fund won’t cover you. That’s just crazy as well, which is why we argue the legislation was fixable, was flawed but fixable and the Government refused to listen to sensible amendments.”
The President of the ACTU, Michele O’Neil, is in no doubt that the Liberal Party is fixated on ensuring that workers and unions stay in their lane and don’t interrupt the cosy arrangement that big finance and banks have in milking workers’ savings through exorbitant fees and outright malfeasance, as revealed by the recent Banking Royal Commission.
“Well, I think it is a bit about class. I think it is this idea that it’s a ruling class that should control the big money. They are the people that are used to controlling it,” O’Neil told the On the Job podcast.
“Fundamentally, it’s about people having a right to pass their working life, when they’ve given so much, have a life where they know they’re not going to be in poverty.
“And we’re not there yet because so many working people still don’t have enough in their super fund, we’re still building it up.”
Given the legislative changes, Labor’s Stephen Jones is encouraging all workers to take an active role in ensuring that their super fund is working for them in the way it should.
“You need to take notice of your superannuation. If you haven’t seen growth somewhere north of six to eight and a half per cent in the last 12 months, you’re in an underperforming fund.
“If you think you found isn’t performing, you should check that out and talk to your union.
“Make sure that you haven’t been put in the wrong fund accidentally.
“It’s so important to take an interest in you super because for most Australians, it’ll be their biggest or their second biggest asset.
“Managed properly they can have a decent nest egg in retirement. Managed poorly, they can lose a lot of money.”